Employer Resources Newsletter - July 2024

Overview

Adare’s most recent HR Barometer Series 8.1 highlighted that one in five organisations found themselves before the Workplace Relations Commission or Labour Court in 2023 due to employment claims. There is always greater scrutiny on redundancy, requiring organisations to be well-informed about all aspects, from communication to implementation. There has been an increase in unfair dismissal and redundancy claims, underscoring the need to adhere to relevant legislation.

With any redundancy process the application of proper procedures, best practices, transparency, and compliance is essential so organisations in the nonprofit sector can avoid complaints, financial redress and reputational damage.

Key considerations when reducing headcount

Where a reduction in headcount is necessary, it is important that impacted organisations ensure they are applying a procedurally correct and legally compliant approach to mitigate the potential financial complications that come with these processes. One of the main issues is ensuring it is done in a fair and objective manner and ensuring a consultative procedure is put in place for employees whose roles are at risk of being made redundant.

A redundancy is genuine if:

• The employer ceases to carry on the business for which the employee was employed, or ceases to carry on the business at the same place where the employee was employed.
• The work for which the employee was employed has ceased, or the requirement to perform that work has reduced.
• The employer has decided to carry on the business with fewer or no employees. Work may be reallocated to other employees.
• The work which the employee performed is to be performed in a different way and the employee is no longer qualified to undertake the work.
• The employee’s work is to be undertaken by another person who is sufficiently qualified and capable to undertake other work for which the employee is not sufficiently qualified or trained.

Financial impact of getting it wrong

If an employer does not follow the correct procedure, they leave themselves open to serious financial implications. Where it is found that an employee was unfairly dismissed, they can be awarded up to two years’ gross salary as compensation under the Unfair Dismissal Acts or an adjudicator may agree to reinstatement in some cases.

Selecting roles for redundancy

To fairly select an employee’s role for redundancy, an employer must first establish which positions are to become redundant. Having established that certain positions are no longer required, employees in that position must be considered against the criteria for selection. When setting out the criteria for selection, employers should consider precedence – has the organisation made redundancies in past and, if so, what selection methods were used. If a particular redundancy process has been previously used by the organisation, there must have a justification for departing from the procedure that was applied previously.

In selecting a particular employee for redundancy, an employer must apply selection criteria that are reasonable and are applied in a fair manner. An employee is entitled to bring a claim for unfair dismissal if they consider that they were unfairly selected for redundancy or consider that a genuine redundancy situation did not exist.

Consultation

Consultation is a critical step to ensuring fair procedures are applied. This is essential to ensure those employees impacted understand the organisational case for change, the risk to the role and to provide every opportunity to explore alternatives that mitigate the risk of redundancy prior to any decision being made. 

Unfair Dismissals legislation

Under the Unfair Dismissals legislation, selection for redundancy based on certain specific grounds is considered unfair. These include redundancy as the result of an employee’s trade union activity, pregnancy or religious or political opinions. The Employment Equality legislation also prohibits selection for redundancy that is based on any of the following nine grounds: gender, civil status, family status, age, disability, religious belief, race, sexual orientation or membership of the Traveller community.

Risks associated with redundancy

Critical to any planned redundancy is the fact that fair procedures must apply, and an Employer must be able to demonstrate all considerations. Implicit in any potential redundancy are the justifications that a genuine redundancy situation exists, fair selection procedures are employed, and legislative requirements are met in terms of procedures and compliance.

If any of the above is not in line with fair procedures or natural justice then an Employee can seek redress under the Unfair Dismissals Acts, the Redundancy Payment Acts, the Protection of Employment Acts or the Employment Equality Acts. It is important to note that the burden of proof in a claim for unfair dismissal is on the employer.

Notice of Redundancy

Under the Redundancy Payments Acts, a minimum of two weeks notice is required. Employers should check what contractual notice is detailed within the employees’ terms and conditions. The greater of the statutory and contractual notice must be given to the employee.

Appeal

Following a decision to dismiss by virtue of the role in question becoming redundant, then in accordance with fair procedures and natural justice an appeal mechanism should be provided to the employee in question. Where an appeal, if made, is found to be unsuccessful and notice has been served then on the date of dismissal, the employer must arrange for the statutory redundancy payment to be made to the employee concerned who should in turn confirm receipt of same. Where an ex-gratia payment is provided a settlement agreement should be signed by all parties involved.

Conclusion

In conclusion, all alternatives must be sought out prior to making the decision to dismiss by reason of redundancy. ‘At risk’ meetings should be had to assist in identifying suitable alternatives and to demonstrate reasonableness through open communication with employees.

Caution must be taken when selecting employees for redundancy ensuring that the selection method is fair, transparent and that the employee is not being selected by reason of any discriminatory ground.

Notice periods in the contract as well as minimum notice must be adhered to. During the notice period employees are allowed reasonable time off to look for work.

In order to be entitled to statutory redundancy payment an employee must have at least 104 weeks continuous service.

Adare is a team of expert-led Employment Law, Industrial Relations and best practice Human Resource Management consultants. If your Organisation needs advice, support, or guidance about compliance requirements or any HR issues, please contact Adare by calling (01) 561 3594 or emailing info@adarehrm.ie to learn what services are available to support your organisation.

Dublin Office: (01) 561 3594 | Cork Office: (021) 486 1420 | Shannon Office: (061) 363 805
info@adarehrm.ie | www.adarehrm.ie

Claim of constructive dismissal by employee rejected due to not complying with employers grievance procedure

Background

Upon returning from maternity leave in August 2023, the complainant was offered a less favourable 'scheduler' position with a higher workload. The complainant refused the new role due to lack of explanation and was told their previous role would be shared with a promoted employee if they insisted on it. After meetings on August 2 and 14, the complainant’s manager confirmed the new role's conditions on August 21. Dissatisfied with the duties and communication, the complainant resigned, claiming a hostile work environment and that they never signed the revised contract and had used all grievance procedures.

The respondent stated the complainant, a Scheduling Team Lead since March 16, 2021, resigned on September 16, 2023, during maternity leave. They cited HSE audits during their absence, which required increased scheduling requirements, and reassured the complainant that their duties remained the same with additional tasks assigned to a colleague. Despite this, the complainant resigned, citing role uncertainty and childcare issues. The respondent argued the complainant failed to use the company's grievance procedure and their resignation did not meet the legal criteria for constructive dismissal under the Unfair Dismissals Act.

Summary of the complainant’s Case:

The complainant testified that on August 1, 2023, while on maternity leave, they were contacted and asked to come to work to discuss a revised contract. The new contract offered a less favourable scheduler position with a larger workload, which they refused to sign due to insufficient explanation. The complainant was informed that a colleague had been promoted and that they would have to share their job if they wanted their previous role.

The complainant requested a meeting on August 2, 2023, and followed up via email. On August 14, 2023, they were told a meeting would be arranged soon. On August 21, 2023, their manager stated the colleague wouldn't be demoted, and if they didn't accept the scheduler position, they would have to share their role with extra duties. The respondent emailed the changed job duties. The complainant worked from home three days a week on scheduling tasks but found team communications difficult and unresponsive.

The work environment deteriorated, making it hard to work from home and creating a hostile atmosphere for their potential return, leading to their resignation. The complainant claims they never signed the employment contract submitted by the respondent and used all grievance procedures available in their contract. Upon returning from maternity leave, they were informed their protected position was given to another employee, and they would only return as a scheduler. The complainant was unaware of any HSE request for more management roles and was present during the HSE audit but saw no need for changes.

Summary of the respondent’s Case:

The respondent, employed the complainant as a Scheduling Team Lead starting March 16, 2021. They took maternity leave in early 2023 and was scheduled to return on September 18, 2023, but resigned on September 16, 2023.

During their leave, the respondent faced several HSE audits, necessitating increased scheduling requirements. Before the complainants return, the organisation assured them that their duties would remain the same and that additional scheduling tasks would be assigned to a colleague.

The complainant's resignation was deemed unnecessary and premature, not meeting the legal standard for constructive dismissal as they didn't use the workplace Grievance Procedure.

In August 2023, a Director for the respondent met with the complainant, confirming they would resume their Scheduling Team Lead role with the same duties, while a colleague would handle new tasks due to HSE audits. The Director emailed a Duty Log on August 21, 2023. However, the complainant resigned on September 11, 2023, citing an "unsure position" upon return and childcare issues.

The Director sought clarification on the "unsure position" and reiterated their previous discussion about the complainant’s duties. Despite this, the complainant confirmed their resignation on September 12, 2023, calling it a "hardest decision."

A HR Manager for the respondent expressed regret over the resignation in a September 28, 2023, email. On October 4, 2023, the complainant apologised for the inconvenience and mentioned a job offer, inquiring about remote or part-time positions. Unfortunately, no such roles were available.

The respondent made extensive legal submissions on the law on constructive dismissal outlining the Complainant has not suffered any loss. 

Findings and Conclusion

This is a complaint of constructive unfair dismissal.

There is conflicting evidence about changes to the complainant's role. They claim it was an attempt to demote them and refused the revised terms, though no actual demotion occurred. Their evidence supporting this claim was unclear and unconvincing.

The respondent argues that the complainant accepted the changes, and their position would remain the same as before their maternity leave.

The situation is complicated by the complainant working from home during their maternity leave, which was unsatisfactory.

Key events:

- August 1, 2023: The complainant was informed of proposed changes.

- August 21, 2023: A meeting was held to discuss the changes.

The complainant was unhappy with the proposals, even though they were not due back at work until September 18th. After the meeting, the respondent sent more information, which the complainant interpreted as evidence of demotion, though they couldn't clearly explain this at the hearing.

The crucial point is that the respondent resigned on September 11th, stating they were not receiving cooperation from colleagues and feared a hostile reception upon returning to work.

Decision

The Adjudication Officer addressed the conflict regarding the complainant's role changes, which she claimed were an attempt at demotion, though no demotion actually occurred. The Officer found the complainant's evidence unconvincing. 

The Respondent argued that the complainant had accepted the changes and would return to her previous role, working from home during maternity leave, with changes communicated on August 1, 2023. The complainant resigned on September 11, citing uncooperative colleagues and fear of a hostile return, but she did not use the internal grievance procedure.

For constructive dismissal, the employer's conduct must be intolerable, and the employee must exhaust grievance procedures, which the complainant did not do. Thus, the Adjudication Officer ruled the resignation was premature and unjustified, failing to meet the legal standard for constructive dismissal. The complaint was not upheld.

Our Commentary:

The Unfair Dismissals Act sets strict standards for justifying the termination of employment contracts. Terminating a contract without cause is a breach of a legally binding agreement. Employers must have valid reasons, follow a fair process, and ensure the decision to dismiss is reasonable based on the employee's conduct.

Complaints under the Act often arise from employees disputing their dismissal, evaluating if the termination met these criteria. Conversely, employees can easily resign by giving notice. However, claims of constructive unfair dismissal, where an employee resigns due to intolerable conditions, are more complex.

In 'Dismissal Law in Ireland', Dr. Mary Redmond states that just as employers must follow disciplinary procedures, employees should use grievance procedures to resolve issues before resigning. The Supreme Court, in Berber v Dunnes Stores, noted that an employer's conduct must be unreasonable and without proper cause for an employee to justifiably resign.

The critical issue in constructive dismissal cases is the employer's behaviour. If the conduct is intolerable, it can justify resignation. However, employees must also try to resolve grievances through available procedures. The EAT and Adjudication Service stress that failing to use these procedures weakens a constructive dismissal claim.

In the current case, the complainant did not use the internal grievance procedures before resigning, despite opportunities to address their concerns. Their resignation was premature and unjustified, failing to meet the legal standards for constructive unfair dismissal. Therefore, the complaint is unfounded.

Employment Permit Holders to be Allowed Switch Employers

On 4 October 2022, the Employment Permits Bill 2022 was officially released. According to the Department of Enterprise, Trade and Employment, the primary objective of this Bill is to enhance the adaptability of the permit system to Ireland’s changing labour market. This Bill aims to streamline the existing legislation by incorporating the previous Employment Permits Acts (2003, 2006, and 2014) into a single unified law, simplifying the application process for all parties involved. Additionally, this Bill introduces two new permit categories: one for contractors employed by non-Irish based employers and a seasonal employment permit tailored to those working in seasonal industries.

The Employment Permits Bill 2022 has been approved by both Houses of the Oireachtas and has just last week, been signed into law by the President. While the main aim of the Bill is to combine and modernise existing employment permits legislation, it also encompasses several important amendments such as:

• Allowing employment permit holders to switch Employers after a period of nine months has elapsed
• Eliminating the requirement to advertise positions in local and national newspapers for the purpose of the Labour Market Needs Test
• Introducing a new seasonal employment permit
• Transferring the operational aspects of the employment permits system from primary to secondary legislation to enable more flexible adjustments as per the demands of the labour market.